Stock-index futures attempt to climb after jobs report

U.S. stock–indexfutures pared losses Friday, pointing to a flat open after a report from the Labor Department showed the U.S. economy adding a less-than-expected 155,000 jobs in November—data investors are parsing ahead of the Federal Reserve’s last rate-setting gathering of 2018.

How are the benchmarks performing?

Stock-index futures turned positive following the jobs report, with Dow Jones Industrial Average futures YMZ8, +0.35% rising 22 points, or 0.1%, at 24,930, after they were trading decidedly lower.

S&P 500 index futures ESZ8, +0.28% rose less than a point, or 0.1%, at 2,691.75. while Nasdaq-100 futures NQZ8, +0.14% trading off 8.75 points, or 0.1%, at 6,817.

On Thursday, the DowDJIA, +0.36% declined 79.40 points, or 0.3%, to 24,947.67, though the index was down by as many as 785 points at its nadir. The S&P 500 index SPX, +0.25% dropped 4.11 points, 0.2%, to 2,696.95, and the Nasdaq Composite Index COMP, -0.10% fell 29.83 points, or 0.4%, to 7,188.26.

For the week, the Dow and S&P 500 are set to show declines of 2.3%, while the Nasdaq has thus far declined 1.9%.

The Thursday afternoon rebound put the Dow and the S&P back into positive territory for 2018, while the Nasdaq built on its gains to rise 4.1% for the year.

The U.S. economy added 155,000 new jobs in November, the LaborDepartment estimated Friday morning, below expectations of 190,000 new jobs, per a MarketWatch poll of economists.

The jobs report also showed the unemployment rate holding steady at 3.7%, as expected. Average hourly earnings grew at 6 cents per hour from October, or 0.2%, just shy of expectations, and grew by 3.1% year-over-year, their highest rate since 2009.

The jobs numbers are of particular importance to investors, as these data will inform The Federal Reserve’s interest-rate-setting committee, the FOMC, as it prepares to decide whether to raise interest rates at its coming meeting Dec. 18-19.

Signs that the FOMC may take a less aggressive tack in normalizing rates have increased, with The Wall Street Journal on Thursday reporting that Fed officials are considering a new wait-and-see mentality at that December meeting.

Expectations for a December interest-rate increase are showing a 76.6% probability, down from 83% a week ago, according to CME Group data, with expectations increasing that policy makers may cool the rate-hike path in 2019.

The jobs data come after a frenetic session that had been colored by fears of intensifying trade battles between the U.S. and China. That was after the arrest in Canada of a top Chinese tech executive at China telecommunications giant Huawei Technologies, which amplified worries in a market already skittish about relations between Beijing and Washington on tariffs and intellectual-property rights.

Those fears combined with a persistent drop in crude-oil prices have made investors particularly on edge, fretting that global economic growth is imperiled.

“Had the this come in really hot, the market would have interpreted it as a number that would force the Fed to raise rates not just in December, but in March too,” he said. “You also didn’t want to miss in a huge way on the down side, as it would have shaken faith in the economy,” he said.

Which stocks are in focus?

Shares of Big Lots Inc. BIG, -17.17% are trading down more than 18% before the bell Friday, after wider-than-expected third-quarter loss.

Shares of Broadcom Inc. AVGO, +3.79% are in focus after the chip maker announced fiscal fourth-quarter profits and sales Thursday evening that topped Wall Street expectations. The stock is up 4.6% in premarket action Friday.

Shares of AltriaGroupMO, +1.82% are in focus after the company announced it would take a 45% ownership stake in the cannabis-firm Cronos Group Inc. CRON, +25.17% worth $1.8 billion. The stock is up 2.5% in premarket action, while Cronos shares are surging more than 43% on the news.

What other data and Fed speakers are ahead?

Wholesale inventories for October are set to be released at 10 a.m.

The consumer-sentiment index also is scheduled to be released at that time

Federal Reserve Board Gov. is set to speak at 12:15 p.m.

St. Louis Fed President James Bullard will talk at 1 p.m.

A reading on consumer credit for October will be released at 3 p.m.

How are other markets trading?

Asian markets traded mostly higher Friday, with the Nikkei 225 NIK, +0.82% rising 0.8% and markets in South Korea SEU, +0.34% and Australia XJO, +0.42% advancing on the day. The ShanghaiComposite Index SHCOMP, +0.03% was virtually flat, with gains of less than 0.1%.

European markets were also trading higher Friday, with both the Stoxx Europe 600 SXXP, +1.51% and the FTSE 100 UKX, +2.20% in the green.